Electronic Arts delivered financial results today above Wall Street expectations. The publisher generated $1.39 billion in revenues for Q4, which beat the $1.19 billion that analysts were predicting. For EA’s fiscal 2020, it delivered revenues of $5.54 billion, which is up 12% year-over-year from $4.95 billion in fiscal 2019.
The company credits its digital sales and strong franchises for its growth. That includes $4.05 billion in digital net bookings for fiscal 2020. That’s up 9% year-over-year, and EA says it accounts for 78% of its total net bookings.
Strong game performance is to thank for that as well. Madden NFL 20 had record engagement, and Apex Legends was the most downloaded free-to-play PS4 game through 2019. Star Wars Jedi: Fallen Order, meanwhile, had more than 10 million unique players.
“We’re humbled to see people around the world connecting through our games during this unprecedented period,” EA chief executive officer Andrew Wilson said. “Thanks to the amazing dedication and determination of our teams at Electronic Arts, we’re able to deliver the games, experiences, and content choices that our players are looking for during this challenging time.”
Electronic Arts is thriving thanks to live-service games
EA chief financial officer Blake Jorgensen says that these results are evidence that its live-services strategy is the future.
“We’ve had a strong year,” said Jorgensen. “Our results this quarter prove the value of the live services path we’ve been on now for a decade. The breadth and depth of our live services give the flexibility we need at times like this to meet player needs.” The company also acknowledge that shifting to work-from-home was tough for its employees. And Jorgensen notes that this is likely a transformational event for EA.
“I want to thank everyone at EA for rising to the challenge,” said Jorgensen. “People across the company have shown extraordinary innovation, energy and ingenuity. Learnings from this period will forever change the way we work at EA.”
As for its near-term guidance, EA is expecting to cruise along on those live-service games. For the Q1 period of its fiscal 2021, EA is telling investors it plans to generate $1.22 billion in net revenue.
But the company is only planning for about $270 million of net income. That weak outlook is driving the company’s stock price down in after-hours trading to approximately $114.15. It previously closed at $119.61.
EA’s Jorgensen has a reputation for very conservative outlooks, though. On top of that, EA is likely investing heavily in next-generation software as Xbox Series X and PlayStation 5 prepare to launch this holiday.
So it’s possible the weak income guidance could pay off in future earnings reports.